Victoria's Secret plans to close 53 stores this year, as more and more women leave the brand for startups and large lingerie retailers.
Sales at stores open at least a year fell 7% in the last quarter of Victoria's Secret, L Brands parent company said Wednesday. Bath and Body Works, the company's other flagship brand, performed well.
Other retailers, including Walmart and Best Buy, have posted strong performances in recent months. And the economy is strong. But Victoria's Secret and its teenage brand PINK have struggled.
Victoria's Secret has failed to adapt to consumer demand for more personalized bras, messages and inclusive advertising. Although the trends in lingerie marketing have changed, Victoria's Secret has for the most part attached to the same gaming book that has helped dominate the industry: bras and celebrity models.
Victoria's Secret relied on strong promotions to attract customers to its stores during the holidays – types of discounts that typically affected margins. The director of L Brands, Stuart Burgdoefer, said the company had been "more promotional than we would like in recent years" during a call with analysts Thursday.
The difficult holiday period and planned store closures are the latest upheavals of the brand. In November, the CEO of Victoria's Secret resigned. In December, her annual fashion show reached her worst ratings. The company closed 30 stores last year to try to escape the narrowest shopping centers.
According to Neil Saunders, an analyst at GlobalData Retail, the company has lost 3.8 million customers over the last two years to rivals such as Amazon and American Eagle's.
The adventure of the Victoria's Secret turnaround also seems difficult. L Brands' forecasts for 2019 have disappointed Wall Street, sending Thursday its share down 7%. He has plunged more than 40% in the last year.
"We are looking closely at the entire industry," Burgdoefer said of the planned changes to remedy Victoria's Secret. Victoria's Secret has more than 950 stores in the United States.
Competition in the lingerie industry has increased in recent years. Startups like Adore Me and ThirdLove have shattered Victoria's Secret's power over the sector by selling better-fitting bras and using ordinary women, not models, in advertising.
"It's an attractive category," said Burgdoefer about the lingerie industry.
Large retailers are also threatening Victoria's Secret. Target launched Monday a new brand of bra and underwear for women and teenage girls called Auden. Auden bras will cost $ 22 and under. Lululemon and Walmart have also stepped up their efforts in the field.
The company has not ruled out ending the fashion show or using more inclusive marketing. But changing your identity may be difficult, said Janine Stichter, an analyst at Jefferies.
"People are recognizing Victoria's Secret with what it has been in the last 20 years – very sexy and highly airbrushed models," she said. "If they were to rotate now, I did not think it would be genuine. They do not have a good option. "